The Federal Government of Nigeria has implemented a new tax regime on imported goods such as vehicles, alcoholic beverages, and single-use plastics. In addition, the government has added these items to the list of prohibited imports.
According to a circular released by the Federal Ministry of Finance, Budget, and National Planning, the new tax system will commence on June 1, 2023. Under the new scheme, imported vehicles with engines between 2000cc (2 litres) and 3999cc (3.9 litres) will be charged a two percent Import Adjustment Tax (IAT) levy based on the value of the vehicle, while vehicles with engines above 4000cc (4 litres) will attract a four percent IAT levy. This new levy is in addition to the existing 35 percent import duty and 35 percent levy imposed on vehicle imports. However, vehicles with engines below 2000cc, locally manufactured vehicles, electric vehicles, and mass transit buses are exempt from the IAT levy.
The Federal Government will also impose a tax of N75 per litre on imported beer, stout, and wine in 2023 and N100 per litre in 2024. Prior to this new tax regime, the government taxed imported alcoholic beverages ad valorem, which is a tax or customs duty levied in proportion to the estimated value of the goods or transactions.
Furthermore, the government has revised the list of prohibited imports, and it now includes used motor vehicles above 12 years from the year of manufacture, paracetamol tablets and syrups, cotrimoxazole tablets and syrups, metronidazole tablets and syrups, and chloroquine tablets and syrups. The list also includes folic acid tablets, vitamin B complex tablets (except modified release formulations), multivitamin tablets, capsules and syrups (except special formulations), aspirin tablets (except modified release formulations and soluble aspirin), magnesium trisilicate tablets and suspensions, piperazine tablets and syrups, levamisole tablets and syrups, penicillin/gentamicin ointments, pyrantel pamoate tablets and syrups, intravenous fluids (such as dextrose, normal saline, etc.), waste pharmaceutiques, and mineral or chemical fertilisers containing the three fertilising elements – nitrogen, phosphorus, and potassium.
The government also introduced a green tax, which will be implemented through excise duty on single-use plastics, such as plastic containers, films, and bags, at a rate of 10 percent.